Wednesday, February 11, 2009

The Mayor Updates Us on "Shovel Ready": Digging Up Roads and FIlling Them Back Up Again

The Mayor writes, after going to a meeting of state and county officials on how to suck down money from the Obama "shovel ready" gravy train.

In order to meet the "shovel ready in 90 days" rule, the only projects that can be considered are those for which the environmental assessments and the engineering are done. Almost all of those will already have some or most of their funding in place. Today, for example, our metropolitan planning organization met because we had until 5:00 p.m. to get a project on the Obama list. We chose one that has a combination of federal, county, and local funding. One of the rules is that the new money cannot replace existing federal money. But local money can be replaced. In our case, the county was going to bond for about $4.5 million in order to take a $13 million project to bid. The bond would be paid for over time from a 1/4 cent sales tax the voters approved--it is bringing in about $1 million a year. If we get the Obama money, the county will not bond. Thus, the stimulus money produces no new jobs in our county. It just saves the County Council from having to borrow. The county will not bond, federal cash will replace the county money, and we can count the project as contributing to the stimulus.

At the state level expect to see lots of lane miles of road improved--that is, the asphalt chewed up by a big machine and laid back down as road base. New asphalt is then put on top of the base. No environmental work needs to be done for existing roads so we should see states improving miles of road that do not need to be replaced because those projects are shovel ready--they can go out for bid in a few weeks. Sounds like digging holes and filling them back up--the perfect Keynesian solution.